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President Donald Trump speaks to members of the media before boarding Marine One on the South Lawn of the White House in Washington, D.C., on Nov. 29, 2018. Bloomberg photo by Andrew Harrer.

Trump scores a win with signing of North American trade pact, but deal still faces hurdles

BUENOS AIRES, Argentina - President Donald Trump Trump celebrated a major political win Friday, Nov. 30, joining the leaders of the Mexican and Canadian governments in signing a new North American trade deal that overhauls the rules governing more than $1.2 trillion in regional commerce and closes the door on a quarter-century of unbridled globalization.

"This new agreement will ensure a future of prosperity and innovation for Mexico, Canada and the United States," the president said.

The deal faces uncertain prospects in Congress next year, where Democrats will control the House of Representatives and may be reluctant to help the president fulfill a 2016 campaign promise as he gears up to run for re-election

"This new agreement will ensure a future of prosperity and innovation for Mexico, Canada and the United States," the president said.

The deal faces uncertain prospects in Congress next year, where Democrats will control the House of Representatives and may be reluctant to help the president fulfill a 2016 campaign promise as he gears up to run for re-election

The agreement also offers a measure of vindication for Trump's uncompromising "America First" stance at a gathering associated with the elite globalism that he denigrates.

The hard part awaits Trump back in Washington.

In the Senate, Sen. Patrick Toomey, R-Pa., who backs expanded trade, says he will oppose the deal unless changes are made to investor protection provisions. Sen. Elizabeth Warren, D-Mass., a likely Democratic presidential candidate, said Thursday that she would oppose the trade pact as inadequate for American workers, foreshadowing a possible 2020 campaign plank.

Major U.S. industries and agricultural interests are also unhappy that the president has not yet removed tariffs on steel and aluminum imports from Mexico and Canada, as administration officials promised during the final stages of the three-way negotiations.

"That's bad news for a lot of us," said Rufus Yerxa, president of the National Foreign Trade Council, which represents multinational corporations.

Even as Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto - on his final day in office - prepared to sign the deal on the sidelines of the G-20 meeting, officials from the three countries were continuing to haggle over terms for lifting the U.S. tariffs, and details of the signing ceremony were in flux.

The deal must be ratified by lawmakers in all three nations, a process that is likely to require much of 2019.

Mexican negotiators were considering an agreement to limit future metals shipments to the United States to 80 percent of current levels, according to Dan Ujczo, a trade attorney at Dickinson Wright.

Canada, meanwhile, is resisting quotas, offering instead to beef up its cooperation with U.S. efforts to prevent inexpensive Chinese steel from entering the American market, according to Eric Miller, president of Rideau Potomac Strategy Group.

Earlier this month, Yerxa's trade council and 33 other industry groups urged the administration to drop its metals tariffs on shipments from the North American nations, complaining that they are driving up costs and hurting sales.

"Tariffs on imports of steel and aluminum are entirely inconsistent with the overall goals of the USMCA," said the letter, signed by the U.S. Chamber of Commerce and groups representing auto, chemical, grocery, retail and agricultural interests.

American dairy and pork farmers have been particularly hurt by retaliatory Mexican tariffs.

Mexican and Canadian officials had vehemently objected to the tariffs when Trump imposed them June 1. But the president, and chief trade negotiator Robert Lighthizer, described them as providing valuable leverage in the dealmaking.

At various times this year, administration officials said publicly that the tariffs would be lifted when a new deal was reached to replace the 1994 North American Free Trade Agreement. The president tweeted in March that the steel and aluminum levies would "only come off if new & fair NAFTA agreement is signed."

Mexico's ambassador to the United States, Gerónimo Gutiérrez, told reporters earlier this month that his government expected that there would be "either a solution or a very clear track to a solution" by the time the deal was signed.

Though the unresolved tariff battle left a cloud over the signing, Friday's scheduled ceremony still represents a signature moment for Trump.

The president has repeatedly called NAFTA "the worst trade deal ever" and came close to withdrawing the United States from it within months of taking office.

Vows to scrap NAFTA and replace it with a better deal also were staples of Trump's campaign rallies across the industrial Midwest in 2016.

The agreement requires that 75 percent of each vehicle granted duty-free treatment be made in North America, up from 62.5 percent in the current treaty, and requires a substantial amount of manufacturing be performed by workers earning at least $16 per hour.

That measure is designed to reduce incentives for American work to shift to lower-cost Mexican factories.

The deal, rebranded by Trump as "the U.S.-Mexico-Canada Agreement," contains new provisions governing e-commerce and cross-border data flows that were not part of the earlier treaty, which was negotiated before the Internet became a major commercial force.

It also underscores Trump's turn away from the global trade deals his predecessors supported in favor of regional or even one-on-one agreements.

"The signing promotes North America as a safe harbor for trade and investment," said Ujczo.

This article was written by David J. Lynch and Philip Rucker, reporters for The Washington Post.

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